Retirement Income Plannning & Institutional Asset Management

How can I create guaranteed income that will last for life in retirement?

How can you create guaranteed lifetime income? Seriously, who doesn’t want guaranteed income! Eighty-four percent of adults polled in a new TIAA-CREF survey want a guaranteed income stream in retirement, and 46% are concerned that they will run out of money, yet only 14% have purchased an annuity to secure a steady stream of lifetime income.

An annuity is not the only way to guaranteed income in your retirement, but it is one of the easiest.

Let’s say that you’re a 65 year old male, and that you need an additional $1,000/month to get by, and you want that income to be guaranteed for your life. By purchasing a Single Premium Immediate Annuity (SPIA) for $179,000, you can get guaranteed payments for $1,000/month, which equals a 6.7% income cash flow. If you die next month, the insurance company would keep the difference, so you can add a cash refund option for $197,000 and your beneficiaries would get the difference lump sum. It drops the cash flow down to 6%, and is still pretty competitive.

Another alternative is that you could buy a joint annuity, that would pay for as long as both you and your spouse were alive, and this would cost $244,000, which reduces the return to 4.9%

Instead of a SPIA, you could buy an indexed annuity for $110,000 at age 56, and structure it to start paying out at age 65 for $1,000/month as well. The benefit of going with the right indexed account is that this $1,000 can cover both you and your wife, and if either one of you were to need at home, assisted, or nursing home care, the $12,000/year income would double to $24,000/year until the money was gone. Once that happened, it would revert back to the original $1,000/month payment for life.

Shop around, because prices, payouts, and special features vary by the insurance company. I like to go to http://www.Sidebysidequotes.com to get instant side by side price comparison options.

If you want to look at your guaranteed income options, give me a call and I can run the numbers for you.

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Disclaimer

The opinions expressed on this site are those solely of David M. Anthony and do not necessarily represent those of Anthony Capital, LLC (AC) or Fact Based Folios.com (FBF). This website is made available for educational and entertainment purposes only. Dave Anthony is an Investment Adviser Representative of AC and director of FBF, an investment advisers registered with the state of Colorado. This website is for informational purposes only and does not constitute a complete description of the investment services or performance of AC. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. A copy of AC's Part II of Form ADV and privacy policy is available upon request. This website is in no way a solicitation or an offer to sell securities or investment advisory services. Dave Anthony, AC, and FBF disclaim responsibility for updating information. In addition, Dave Anthony, AC, and FBG disclaim responsibility for third-party content, including information accessed through hyperlinks. -